Gold & Silver Dealers

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josephcolorado
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Gold & Silver Dealers

#1 Unread post by josephcolorado »

I saw something today at a local coin dealer that I have never seen before. Usually, coin shops are very quite, with very few people. Today, however, person after person was coming in with hundreds of ounces of silver, and the business would pay just a little bit lower than spot, and everyone was walking out with cash, thousands of dollars. Seeing this got me thinking, how does a business dealing silver, lets say, make money? I know about the spread and all, but what about the fact that one day they buy a bunch of silver at 23 dollars, and then silver drops to 20. The shop has a bunch of inventory from people unloading their silver. They don't seemed concerned about this. If silver is up, they pay more. If silver is down, they pay less. However, as a dealer do you make money doing this? Let's completely drop the neumismatic portion of the business. From what I saw today, no one was buying rare coins. It was all about brief cases of silver bars. Huge silver bars. Stacks of them. And the store just paid out cash like it was nothing. What if silver dumps? What about the stock the store is holding? Theoretically, can't the same people come back when silver has dropped and buy it back for less? (mind blown).
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Re: Gold & Silver Dealers

#2 Unread post by Daniel »

A dealer like this is moving inventory in the dealer groups, paying less than melt is low with the current market. However, in the dealer networks they can get over melt for it. Also, we cost average on items we pay a little much for or when the price drops. It's a revolving door that is not for the faint of heart. People do not understand this business until they worked behind the counter.

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